Legalizing Pot

For those of you who haven't been paying attention, last year Washington and Colorado both passed initiatives that legalize the recreational use of marijuana.  The regulatory regimes were supposed to be regulated in "a manner similar to alcohol".

For the record, I'm not advocating for the legalization of marijuana.  I've heard the arguments on both sides, and I'm simply not convinced.  However, the voters in those states were convinced and they passed the proposition.  Now, the state is trying to figure out how to deal with it, and it looks like they're going to tax the living hell out of it.  Which is fine, except that the free market is at work.

The upshot of such actions is predictable and depressing. Colorado lawmakers are banking on about $70 million a year in taxes from pot and their Washington counterparts have projected new revenues of $1.9 billion over the first five years of legalization. There’s just no way that’s going to happen if a legal ounce of pot is double the price or more of back-alley weed. Even the most stoned pothead isn’t that easy to scam.

Taxes have to be seen as fair on luxury, or sin items (and marijuana is definitely considered one or the other) or people will find a way around them.  The linked article says that a legal ounce of marijuana, after the tax man gets his bite, might be as much as between $482 an ounce and $723 an ounce.  The black market is going to love those prices.

If you're supposed to regulate it in a manner similar to alcohol, the most consumers would expect to see packs of Alcapulco Gold pre-rolled, right next to the Jack Daniels on the likker store shelves.

Again, I've heard all the arguments, and I'm not convinced, but it looks like the state tax-man is going to do his best to suppress the pot that the voters want.  Let Freedom Ring.